Will Fiat S.p.A.'s Alfa Romeo Project Lead to a New Dodge Challenger?

The big brawny Challenger is a classic Dodge product. But the next Challenger could be very different: It's likely to be built on an all-new platform created for Alfa Romeo. Source: Fiat Chrysler.

We've learned a lot about Fiat Chrysler's  (NASDAQOTH: FIATY  ) ambitious plans for Alfa Romeo recently.

Last month, CEO Sergio Marchionne and a team of executives laid out the newly merged company's five-year product and investment plan. During that presentation, the company revealed that a "skunk works" of about 200 engineers was hard at work in a secret location on a new rear-wheel-drive vehicle architecture to underpin a new generation of Alfa Romeo sedans.

That "skunk works" team is working outside of FCA's usual product-development channels so that they have no interference in their mission, executives said. That mission? To create a "best-in-class rear-wheel- and all-wheel-drive architecture for global products." Alfa Romeo is being reborn as a global competitor to the German luxury brands. It's a big part of Marchionne's effort to increase FCA's global presence and -- importantly -- the company's profitability, which lags many rivals. 

As Motley Fool senior auto specialist John Rosevear explains in this video, the new architecture will serve as the basis for a new range of compact and midsize vehicles, including both sedans and crossover SUVs. But it's not just going to be limited to Alfa Romeo: Marchionne has dropped very strong hints that this brand-new architecture will also serve as the basis for the all-new Dodge Charger and Challenger, both of which are due in 2018.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for Fool.com. We've learned a lot about Fiat Chrysler's plans for the Alfa Romeo brand in the last month.

It turns out that the company has had a "Skunk Works" going for a couple of years now, a secret team of engineers in Italy, about 200 people hand selected from all over the company including some from Chrysler, working an an all-new rear wheel drive platform that will be the basis for a new line of Alfa Romeos that will start to appear next year.

The team is lead by two senior people from Ferrari, and it was specially set up outside of the usual Fiat Chrysler product development process, so that they could have the freedom to meet their very strict objective, which is creating the best-in-class rear-wheel drive and all-wheel drive architecture that can cover vehicles from C to E segments, basically from 3-Series size to 5-Series size, including SUVs.

There are eight products coming for Alfa on this platform by the end of 2018. The first vehicle is due in the fourth quarter of next  year,  it's what Alfa calls a midsize sedan, and it'll probably be aimed at the BMW 3-Series.

Now, this is a big deal for Fiat Chrysler, CEO Sergio Marchionne really really wants to improve the company's profitability, and following the example of Volkswagen  (NASDAQOTH: VLKAY  ) with its super profitable Audi and Porsche brands, he's planning to turn Alfa Romeo, along with Maserati, into a global competitor to the German luxury brands.

And it's emerging that there's more to this plan. It's starting to look like Fiat Chrysler's plan for the Dodge brand is closely linked to the plan for Alfa.

Marchionne commented recently that this new rear-wheel-drive platform would eventually be shared with FCA's American brands, it seems very likely to be the basis for the next-generation Dodge Charger and Challenger that are due in 2018, and it's possible it could spawn some smaller Dodges too, like a successor to the compact Dart that is rear-wheel drive. 

We know that they're planning a major overhaul for the Dart that is due in June of 2016, according to Dodge's five-year product plan, and a replacement for the Dodge Journey crossover that is due around the same time, both are supposed to be reworked to be more in line with what Dodge stands for now, to be "aligned with the brand DNA" of Dodge.

Now, that doesn't mean that Dodges are going to be Americanized Alfa Romeos. Fiat Chrysler is putting a lot of effort into making sure each of its brands has its own distinct character, and I think the new Dodges are going to be much more in the very American spirit of the Charger and the Challenger as we know them today -- roaring Hemis and all -- than like the upcoming new Alfas. But they'll be sharing what should be some very good parts under the skin and that will lower the costs of the Alfas -- and improve the profits -- while making the next Charger and Challenger lighter and more agile.

It's a great plan, the recent Chrysler products have been pretty strong, I'm looking forward to seeing how they execute on it. Thanks for watching.


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